Global Construction Outlook Q2 2025

Global construction activity is forecast to fall 2.4% over 2025 to US$9.4tn and then grow 3.4% in 2026 to US$9.8tn (all values in constant currently 2023 prices). While this is a significant downgrade from our pre -liberation day Q1 update, it remains broadly inline with our post liberation day interim forecast update. The interim update also included upgrades in Europe to capture increases in defence spending.

We have upgraded our medium -term outlook for China. Reduced US tariffs are expected to support private sector activity, and we have increased our assumed proportion of total government investment being directed towards civil engineering construction work.

• Residential building activity is forecast to fall 4.4% over 2025 to US$3.70tn, before rebounding 5.7% in 2026 to US$3.9tn. The Chinese real estate downturn continues to dominate the sector, with commencements taking another step down. Activity outside China will grow over 2025 as work in Europe rebounds and emerging economies continue to see strong levels of residential construction activity.

• Non -residential building activity is forecast to fall 5.3% in 2025 to US$2.63tn and then grow 1.0% in 2026 to US$2.65tn. US tariffs are set to weigh on industrial building activity. Industrial building activity in the US is also falling following the temporary boost from the CHIPS Act.

• Civil engineering activity is forecast to grow 3.0% in 2025 to US$3.1tn and 4.6% in 2026 to US$3.3tn. We continue to expect the US’s Infrastructure Investment and Jobs Act (IIJA) stimulus will remain intact under the Trump administration, however, the threat of deportations remains a key downside risk for the US industry.